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VAT Reduction

techguy
Grafter
Posts: 2,540
Registered: ‎12-09-2008

Re: VAT Reduction

Brown, Cameron or Clegg, it doesn't really matter all that much, they are all thieving scum
Was glad to see the 45% tax on those earning over 150k but again not until after the next election so my money is on it being scrapped when party donors complain.
As usual there's bugger all in there for people like me and a good proportion of the readers of these forums on an average salary that put in the hours long after their overpaid masters go home to keep things running and paying customers happy.
We need a 2 day national strike to show them whose boss.
itsme
Grafter
Posts: 5,924
Thanks: 1
Registered: ‎07-04-2007

Re: VAT Reduction

Quote from: techguy
Brown, Cameron or Clegg, it doesn't really matter all that much, they are all thieving scum
Was glad to see the 45% tax on those earning over 150k

If you believe they are thieving scum when the rate is 20% why don't you think they are when the rate is 45%?
Community Veteran
Posts: 26,778
Thanks: 980
Fixes: 10
Registered: ‎10-04-2007

Re: VAT Reduction

Quote from: HPsauce
It's sort of ironic that the media reaction to a 2.5% VAT cut is to find people who think it's so small that it's pointless, yet the mere discussion of an option of a future 1% increase is seen as an intolerable burden.  Crazy

I wish we had a button to recommend posts on here - I'd have certainly pushed it for this one!
jelv (a.k.a Spoon Whittler)
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Community Veteran
Posts: 6,735
Thanks: 12
Registered: ‎02-02-2008

Re: VAT Reduction

Quote from: Lurker
Where is the money coming from for all these *refunds*?

Being realistic it will all "come out in the wash" when the rate reverts again in 13 months time, so it doesn't matter what they do as long as it's consistent at each end.
Personally I'd go for the "easier to implement" option if I was PN.
Community Veteran
Posts: 1,100
Registered: ‎05-04-2007

Re: VAT Reduction

From a work perspective the 2.5% will make a difference I can spend from my budgets as I am unable to reclaim the VAT. From a personal perspective I don't think it will make much difference as the 17.5% tax rate does not apply to my main outgoings.
nadger
Rising Star
Posts: 4,498
Thanks: 46
Registered: ‎13-04-2007

Re: VAT Reduction

Personally I'd be quite happy for Plusnet to donate my December 53p to the hospice they support.
Overall it does seem that the people making "official" statements have never been VAT registered or dealt with VAT invoicing.
If I get 13 invoices @ 15% then that's fine. Obviously there'll be an overlap in the invoice periods but the invoice date controls the rate not when I actually receive the service.
Personally I think the VAT change is a political gimmic. The change I will never forget was when VAT increased from 7.5% to 15% - that really had an effect on prices.
Moderator
Moderator
Posts: 27,666
Thanks: 2,059
Fixes: 217
Registered: ‎14-04-2007

Re: VAT Reduction

So this morning I've had it officially confirmed that the reduction is not a legal requirement as I thought considering it is a government tax.
So we can all continue to charge our customers 17.5% safe in the knowledge that our competitors will charge 15% and steal all our customers Crazy

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itsme
Grafter
Posts: 5,924
Thanks: 1
Registered: ‎07-04-2007

Re: VAT Reduction

You would see the price drop if the law allow the manufacturer to set the price. But because it's up to the retailer to set the prices they can charge what ever they like plus the current rate of VAT.
nadger
Rising Star
Posts: 4,498
Thanks: 46
Registered: ‎13-04-2007

Re: VAT Reduction

If I supply you with a service for £20 including VAT there's nothing that says I have to reduce that price. I would account to HMRC for the 15% and pocket the 43p as extra profit. This will no doubt happen in a lot of cases.
Moderator
Moderator
Posts: 27,666
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Registered: ‎14-04-2007

Re: VAT Reduction

Yeah basically the government demands a percentage of your annual invoice value as VAT whether or not you pass it on to your customers.
I have seen instances of retailers offering to 'pay your VAT for you on purchases made this month'. All they are doing is absorbing the 17.5% as a promotion to encourage cash flow. They still have to pay it to the government.

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Lurker
Grafter
Posts: 1,867
Registered: ‎23-10-2008

Re: VAT Reduction

Quote from: HPsauce
Quote from: Lurker
Where is the money coming from for all these *refunds*?

Being realistic it will all "come out in the wash" when the rate reverts again in 13 months time, so it doesn't matter what they do as long as it's consistent at each end.
Personally I'd go for the "easier to implement" option if I was PN.


You are missing the point of my post. (I agree with what you are saying, but its an entirely seperate question.)
PN say on their blog that they will refund a proportion of VAT for people who have already paid for services that they will receive after 1st December.
Where will PN get the money from to do this?
The VAT rate which applies to a purchase is the VAT rate at the time that the invoice is raised.
PN cannot pay the VAT at a lower rate for invoices raised at a higher rate, so they will be paying HMRC 17.5% VAT on invoices raised up to 1st December.
Somehow they are also going to fund giving customers 2.5% back - pro rated for the period after 1st December.
I'm just interested what the benefit is, and where the money comes from.
Community Veteran
Posts: 6,735
Thanks: 12
Registered: ‎02-02-2008

Re: VAT Reduction

No I'm not missing the point at all, I don't think you understand what I'm saying.
If they do the equivalent in 13 months time it will balance out.
Though PN will have to find the (relatively small) amount in the meanwhile and effectively lose 13 months interest on it.
Though if their business has grown they might be better off.  Wink
Lurker
Grafter
Posts: 1,867
Registered: ‎23-10-2008

Re: VAT Reduction

It has nothing to do with the number of months.
If you buy something today for which VAT applies, the rate which you should pay (for standard rate VATable items) is 17.5%, regardless of when you will consume the item, or use the service.
Plusnet will have to pay HMRC (Her Majesty's Revenue and Customs) the VAT for any items they invoice before the 1st of Dec at a rate of 17.5%
If Plusnet decide to issue a refund, they will therefore have to issue it from their own pockets.
Plusnet will still be paying the HMRC the full 17.5% - so where will they get this 2.5% for x% of a month from in order to refund it?
Community Veteran
Posts: 6,735
Thanks: 12
Registered: ‎02-02-2008

Re: VAT Reduction

Ignore. Removed - something went wrong while editing!
Community Veteran
Posts: 6,735
Thanks: 12
Registered: ‎02-02-2008

Re: VAT Reduction

Quote from: James_G
It has nothing to do with the number of months.

Correct. I never said it did.
Reread my comments. I'm not disagreeing  Wink